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A CLOSER LOOK AT OIL, DIAMONDS, AND CIVIL WARby: Michael Ross
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Notes for this articleRoss created four new variables for minerals, Fuel rents per capita, Nonfuel rents per capita, Fuel onshore per capita, and Fuel offshore per capita, using the datasets from Hamilton & Clemens (1999), Humphreys (2005) and PETRODATA (Lujala et al.)
Ross created three new variables for diamonds, Diamond production per capita, Primary diamonds per capita, and Secondary diamonds per capita, using the datasets from Humphreys (2005) and Lujala (2005)
Ross used the rare events logit estimator.
Ross finds that his more precise measures of minerals and diamond production are robustly correlated with civil war onsets. In terms of war duration, he finds no evidence that the production of hydrocarbons or diamonds at the country level is correlated with the duration of civil wars. Also, the direction of causality between contraband funding and conflict duration is open to question.
He also finds evidence that trade shocks account for part of the correlation. That is, negative shocks are associated with separatist conflicts and positive shocks with national conflicts.
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AbstractStudies of natural resource wealth and civil war have been hampered by measurement error, endogeneity, lack of robustness, and uncertainty about causal mechanisms. This paper develops new measures and new tests to address these problems. It has four main findings. First, the likelihood of civil war in countries that produce oil, gas, and diamonds rose sharply from the early 1970s to the late 1990s; so did the number of rebel groups that sold contraband to raise money. Second, exogenous measures of oil, gas, and diamond wealth are robustly correlated with the onset of civil war. Still, these correlations are based on a small number of cases, and the substantive effects of resource wealth are sensitive to certain assumptions. Third, petroleum and diamond production lead to civil wars through at least three different mechanisms. Finally, the only resource variable robustly linked to conflict duration is a measure of "contraband," which includes gemstones, timber, and narcotics.
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